• 4 minutes Ten Years of Plunging Solar Prices
  • 7 minutes Hydrogen Capable Natural Gas Turbines
  • 10 minutes World looks on in horror as Trump flails over pandemic despite claims US leads way
  • 13 minutes Large gas belt discovered in China
  • 37 mins Would bashing China solve all the problems of the United States
  • 39 mins Model 3 cheaper to buy than BMW 3 series.
  • 2 hours Yale University Epidemiologist Publishes Paper on Major Benefits of Hydroxchloroquine for High-risk Outpatients. Quacksalvers like Fauci should put lives ahead of Politics
  • 1 hour Pompeo's Hong Kong
  • 1 min Thugs in Trumpistan
  • 3 hours China To Boost Oil & Gas Exploration, As EU Prepares To Commit Suicide
  • 1 day COVID 19 May Be Less Deadly Than Flu Study Finds
  • 3 hours China’s Oil Thirst Draws an Armada of Tankers
  • 35 mins Coronavirus hype biggest political hoax in history
  • 13 hours Income report showing potential future spending and economic growth
  • 14 hours US-China tech competition accelerates: on Friday 05/15 new sanctions on Huawei, on Monday 05/18 Samsung chief visits China
  • 15 hours The CDC confirms remarkably low coronavirus death rate. Where is the media?
  • 2 days China to Impose Dictatorship on Hong Kong
Deja Vu: OPEC's Recurring Oil Production Dilemma

Deja Vu: OPEC's Recurring Oil Production Dilemma

Saudi Arabia, OPEC’s largest producer…

Canada’s Energy Watchdog Throws Bone To Oil Producers At Enbridge’s Expense

The Canadian Energy Regulator, formerly the National Energy Board, will delay a change proposed by Enbridge in the way it does business with oil producers that has angered these same producers.

Enbridge’s proposal, according to Reuters, involves a switch to fixed-volume, long-term contracts for 90 percent of the capacity on the Mainline pipeline network—the largest pipeline network that sends Canadian crude to the United States. The capacity of the network is 2.85 million barrels daily.

Yet producers are unhappy about it. Last week, Shell and Suncor approached the regulator to ask that it review Enbridge’s proposal and does so urgently. Earlier, MEG Energy and the Explorers and Producers Association of Canada also complained to the energy watchdog about the proposed change.

According to the producers, the terms of the open season Enbridge launched for its pipeline network would favor large refiners from the United States, such as BP and Exxon, over producers. Another cause for concern is that the long-term, fixed-volume contracts would force Canadian producers to send more crude to the Midwest rather than the Gulf Coast, which is a way more liquid market.

“Shell is concerned that the open season and the offering may represent an abuse of market power,” the supermajor’s Canadian subsidiary said in its letter to CER. According to the company, Enbridge is forcing producers to sign up for the fixed volumes under long-term contracts because they have few other export options due to the lack of sufficient pipeline capacity in Canada’s oil-producing regions.

Enbridge launched the open season for bids under the new terms in early August. According to critics, it should have first sought the approval of the regulator before announcing open season.

Now, the CER has announced a process of gathering comments on the Enbridge proposal and this process will almost certainly delay the switch to the new contract terms in case CER approves them.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News